Porter Medical Center Interim CEO: 'We're In A Rebuilding Phase'

Oct 6, 2016

This summer, Porter Medical Center's board of directors announced that the hospital may become a partner of the University of Vermont Health Network. The announcement comes after Porter's financial issues and layoffs made news back in February, though the current interim CEO says now that Porter is in the process of "rebuilding."

The 25-bed hospital in Middlebury had reported losses of $11 million since 2012, and hospital officials said it had become increasingly difficult to get hospital expenses to match revenues – a problem facing many small community hospitals. To trim the budget, Porter announced layoffs, which included eight nurses. And it had pulled the contracts of all the Porter physicians, requiring them to sign new, changed contracts within 90 days.

A lot has happened since Vermont Edition's February discussion about the state of the hospital. Dr. Fred Kniffin, interim CEO of Porter Medical Center, spoke to Vermont Edition this week to provide an update, including the efforts it is taking to regain financial stability and what the future may still hold.

Possible partnership with UVM

While the board considered several different alliances, Kniffin explains why he feels the possible partnership with UVM makes sense.

"You know, we already have a virtual clinical affiliation," Kniffin says. "And what I mean to say by that is half of the patients in our service area get some part of their care at UVM. So we already share a large portion of our patients between the two organizations. A lot of us train there – about half our medical staff did some part of their education or training there. It's the tertiary care center to which we refer.

"We share a mission. UVM wants to take care of their community; we want to take care of our community. We want to share the specialty care. So for a whole lot of reasons, it looks like it could be a win-win."

"We share a mission. UVM wants to take care of their community; we want to take care of our community. We want to share the specialty care. So for a whole lot of reasons, it looks like it could be a win-win." - Dr. Fred Kniffin, Porter Medical Center interim CEO

Kniffin says discussions of what this possible partnership may look like have been going on for the past six months, but there hasn't been a commitment. The next step in this process, he says, would be for the board of directors at each organization to vote on a non-binding letter of intent.

"That is exactly what it sounds like – it's non-binding, so either party could back out," Kniffin explains. "And it states an intention to look into the details, to really dig in and say, 'Look we've had some conversations and it sounds like this might be a win-win, but let's dig deeper and find out for sure.'

"And that process would take, we're hearing about six months – at which point we would say, 'Nah, this doesn't really make sense for one or both parties' or 'Yes, it does make sense' and then we would move forward with a definitive agreement."

Kniffin notes that Porter Medical Center has core services that they are dedicated to continuing, which they've discussed with UVM.

"We're not doing brain surgery or crazy stuff," Kniffin says about Porter's services. "We're doing really basic community hospital appropriate type service. We're hoping at very least to keep it the same. And I'm cautiously optimistic that we're going to make it better."

He says that working together with UVM could help with the specialty services at Porter that are otherwise difficult to maintain. Kniffin adds the hope is to both offer new services and strengthen some existing ones.

Staffing challenges

One of the big concerns that came up when the financial losses and subsequent layoffs and contract re-negotiations were first reported was fear that patient care would be negatively impacted and that access to specialty care, even some primary care offices, might be affected.

"This winter and into early spring, we had some significant disruptions in the services that we offer, both inpatient and outpatient ... We lost 40 nurses. We only employ 140 nurses," Kniffin says. "So it becomes difficult to care for the patients when you lose that big a chunk of your mission-critical workforce."

"When you lose 10 of the 25 or 30 primary care physicians in your community, that's disruptive. And it's been a challenge for the organization, and it's been a challenge for our community."

In addition to the nurses, Kniffin also estimates that they lost 10 primary care doctors.

"When you lose 10 of the 25 or 30 primary care physicians in your community, that's disruptive," he says. "And it's been a challenge for the organization, and it's been a challenge for our community.

"You know, the good news is we've been rebuilding. Frantically, we've hired 35 nurses which is another amazing number. We're on track to hire almost back to what we had in primary care capacity by the first of the year. So, we're in a rebuilding phase."

Staff morale

One of the other issues that staff members brought up last winter was the low morale at Porter, because of what staff described as a lack of communication. Some staff members told Vermont Edition that they hadn't been included in discussions about cost savings, that their input hadn't been sought and that it caused a lot of anger and hurt feelings.

Kniffin acknowledges these critiques and says that when he accepted his current position back in March, addressing the staff morale was on his list.

"I've been an employee here for 26 years; it was painfully clear to me what needed to happen," Kniffin says. "And the first bullet point in my formula was that we need to value and respect our staff. That they're feeling undervalued and disrespected and at times dispensable. And when people feel dispensable, if they're mobile – like doctors and nurses are – they leave. They dispense themselves and that's exactly what had happened."

"When people feel dispensable, if they're mobile – like doctors and nurses are – they leave. They dispense themselves and that's exactly what had happened."

Kniffin also notes that another focus point for him was Porter needing to "change the style" in its approach to carrying out ideas.

"There have been a lot of gains made," Kniffin says. "We've pushed forward with some of the initiatives that are underway but we're really trying to do things differently. Specifically we've slowed down a little bit. We come up with good ideas in administration. We take them to the end users. We say, 'This is what we'd like to do. This is why we'd like to do it. This is what we're hoping to achieve. And now, please help us. Tell us how you think we should do this,' and then we all work together to move it forward.

"And it takes a bit more time up front, but it saves us some time on the back end. It's not a mission-accomplished moment here at Porter, but things are clearly better."

Layoffs

When asked if there are any more layoffs planned, Kniffin says "no."

"One of the areas that's making people anxious is the affiliation process,"  Kniffin says. "And whenever I speak to our staff about this issue, that is at the forefront of their minds: 'Does affiliation mean that I'm going to be laid off?' And what we've learned is that that's not typically the case. That we still need people to provide the care, to maintain the facilities, and that's not generally where the big savings come from ...

"We're always looking for opportunities to decrease expense and unfortunately staffing is our biggest expense. But I don't see any big layoffs in our immediate future."

"Looking at our current finances, we have 80 days cash on hand which, you know, is not great but it's not what we call a burning platform. So we're always looking for opportunities to decrease expense and unfortunately staffing is our biggest expense. But I don't see any big layoffs in our immediate future."

Porter's finances

As far as Porter's fiscal health, Kniffin says it has improved a little, but there is still work to be done.

"We had forecast a $1.4 million loss for this fiscal year that just closed and it looks like we're going to have a slight gain, somewhere in the $1.8 million gain, and that's our bottom, bottom line," Kniffin says. "That's not great performance. We have ongoing work to do to improve our financial performance for this year. But we're not bleeding, as we were six to nine months ago."

The permanent CEO search

Kniffin says the search for a permanent CEO is currently on pause.

"One of the big reasons we're not searching is the affiliation process," he says. "Apparently, there's two different hires: one hire is a CEO for an independent Porter and another hire is a CEO for a partner Porter. Apparently they're like apples and oranges. And we need to make that decision before we can move forward in the recruiting process, so I've agreed to stay on while we sort through the affiliation process and then we'll go from there."

Update 11:28 a.m. Oct. 7, 2016 After this interview took place, Porter Medical Center announced that Kniffin has been appointed CEO on a permanent basis. He is no longer the "interim" CEO.